Quotes of the Day
At the Job Cafe Osaka, unemployment is made to seem almost agreeable. The experimental job-placement office, partially owned and operated by the Osaka city government, is staffed by women in brightly colored uniforms who greet their downcast clients with a bracing, robotically cheerful "Konnichiwa!" Job seekers, most of them dressed in dark blue "recruit suits," help themselves to free coffee, juice or oolong tea while perusing binders of employment listings and speaking to job counselors or company recruiters. The song Don't Worry, Be Happy endlessly loops over the sound system.
All the free coffee and upbeat Muzak could not lift Naoki Ijiri from his jobless gloom. The 25-year-old polytechnic college graduate had come to the job-placement office this spring after searching fruitlessly for work for six months—long enough to convince himself that he would never find a career to match his training as an environmental-systems engineer.
Opportunities in Japan's second largest metropolis are scarce; Osaka prefecture's unemployment rate of 6.4% was the third highest in the nation last year. Even if he could find work, Ijiri says he feels unprepared to join the winner-takes-all rat race of postindustrial Japan. He longs for his father's era, the heyday of Japan Inc., when young adults were whisked directly from college into a womblike corporate career, where they would be sheltered by a paternalistic business culture for life. "People like me who aren't particularly talented at anything are happier with the old system of lifetime employment and seniority-based salaries," he says. "The supposed 'chances and opportunities' that a competitive economy offers is for those who are already steps ahead." Ijiri later found work as a security guard, hardly the future he once envisioned for himself.
In Japan today, reduced expectations are becoming increasingly common. As the world's second largest economy struggles to evolve from its mainstay manufacturing base into technology and high-value service industries, several generations of Japanese are in danger of becoming lost in transition. Following the crash of the early 1990s that ended the Japanese postwar economic miracle, Japan's public and private sectors have been slashing their work forces, cutting off bad-risk borrowers, and streamlining operations in an attempt to remain competitive in an increasingly global economy. Many of its world-class companies have succeeded in doing just that, and economic growth is beginning to nibble at the unemployment figures. In April, Japan's jobless rate was 4.4%, the lowest since December 1998.
But the success of some is being offset by the struggles of many, for whom jobs are no longer plentiful or secure. Japan, a country that prides itself on social harmony, homogeneity and an equitable distribution of wealth, is bifurcating along geographic and social lines into camps of permanent winners and perpetual losers—the former a highly educated and trained core of élite employees and entrepreneurs working for internationally competitive companies, the latter an increasingly marginalized yet growing sector of society comprising primarily elderly rural poor and despairing urban youths like Ijiri. "In the past, people believed that the whole nation was getting wealthier, and the rich were simply the people who got there quicker," says Toshiki Satou, a sociologist at the University of Tokyo (U.T.). "But that is changing. People are becoming more aware of class."
This increasingly distinct divide between rich and poor is so vivid in the national consciousness that it has been given a name: kakusa shakai (a society of disparity). It isn't hard to find statistical evidence of the phenomenon. In a land once noted for its armies of workaholic salarymen, part-time employees now account for 30% of the labor force. In February, the government announced that the number of people on welfare rose 60% over the last 10 years, reaching 1 million citizens for the first time since the program started in 1950. And according to recent findings by the Organisation of Economic Co-operation and Development (OECD), 15% of Japan's households today are living in poverty (defined as having incomes that are half the national average or less). That compares with an average of 10% of households below the poverty line for all 30 OECD countries. In wealthy Scandinavia, the average is less than 5%. Japan's rich-poor divide is particularly worrisome, warns a January OECD report, because of the "lack of movement between the two segments of the work force, trapping a significant portion of the labor force in a low-wage category from which it is difficult to escape."
To get a glimpse of the wealth gap, travel 400 km from prosperous Tokyo to the Shimane prefecture town of Ohda, a listless burg struggling to support its aging population of 33,000. Along an incongruously wide, modern superhighway linking Ohda with the nearest train station, the only signs of economic activity are abandoned construction sites. Shimane is one of the poorest and least populated regions in Japan and has no industry to speak of save public-works projects; one out of eight residents is tied to the construction industry. But because of fiscal austerity measures implemented by the Shimane prefectural government, even public-works jobs are under threat.
The cutbacks have hit people like construction company owner Kazuharu Shimogaki hard. Shimogaki's firm peaked in the early 1990s, when sales reached $8 million and he employed 80 people. Now, the company has just 18 on its payroll, and sales have dropped to less than $1 million. A few years ago, Shimogaki, 57, diversified into garbage incineration and a blueberry-farming operation that has yet to turn a profit. Shimogaki inherited his business from his father, but none of his four children is interested in taking it on. "Times are changing," says Shimogaki, with a trace of resignation. "If we can't change with them, we'll all sink."
Much of Japan already has that sinking feeling. A decade ago, 90% of Japanese considered themselves "middle-class." In an Asia-wide survey conducted by U.T. last year, however, 60% of Japanese now rate their economic status as "below middle-class." The public's increasing awareness of kakusa shakai is reflected in the Japanese media's obsession with who is up and who is down. Whether in magazines, on TV chat shows or on bookstore shelves, the domestic debate is dominated by the idea of kachigumi and makegumi ("the winning team" and the "losing team"). Fashion magazines are filled with beauty tips to marry early and avoid being a poor, single woman. Newsmagazines list the names of middle schools that readers' kids should attend to assure they grow up to be winners. Weeklies show what the winners are wearing and where they are eating, while literary essays ponder the meaning of winning and losing in life.
At least people like Shimogaki—struggling nobly in the face of adversity—enjoy a measure of sympathy from their countrymen. In comparison, no consequence of Japan's restructuring has so vexed the country as the rise of the "freeter"—the name for a highly educated young person who seems to have it all but stops trying. Because a college education has become less likely to guarantee lifetime employment, the sons and daughters of baby boomers have increasingly resorted to taking part-time or temporary jobs without high pay or much chance of job development. (Coined by a job-placement magazine, "freeter" is a combination of the English word free and the German word Arbeiter that means worker.) Initially romanticized for their nonconformist attitudes when the trend was first spotted in the 1980s, the number of freeters has since grown to some 4 million, or about 20% of the country's 15- to 34-year-olds, according to the UFJ Institute, a Tokyo-based think tank. Now they're viewed as slackers, unproductive dropouts in a society that increasingly needs youthful economic vitality. Particular wrath is reserved for the "parasite singles"—freeters who maintain a high standard of living despite low pay (or zero pay) by moving in with mom and dad.
Many freeters say they would be happy to work, if only there were opportunities. Tsuyoshi Sasamoto, 24, graduated from college in spring with a degree in architecture even though he decided midway through his course that he didn't like the discipline. What he really wants to be, he says, is a fashion designer, but he's done little to break into the field other than look at some job listings every few weeks. "I don't know anybody in the industry," he says, "but I'm hoping to find something that pays about 200,000 yen [approximately $2,000 a month]." In the meantime, he works as a furniture mover in Tokyo. Then there's Rika Saihara, 23, who recently quit a full-time job with a storage company because, she says, she didn't fit in at work. She hasn't had a job in three months, but because she is living at home with her parents in Tokyo, she doesn't feel any rush. "I am thinking of registering at a temp agency and looking for some type of social work," she says. "I just want to help people."
Akiko Miyamoto, manager of the unemployment office that Sasamoto frequents, says she sees the same story again and again: a sense of entitlement and unrealistic expectations followed by depression and paralysis once the going gets tough. "People come in wanting to be designers or photographers or editors," she says, "but there are very few jobs in those fields posted here." While a few freeters may land fantasy jobs someday, Masahiro Yamada, a professor of sociology at Tokyo Gakugei University, is worried about the larger picture. "Freeters may choose the lifestyle at first, chasing a dream," he says. "But many will find themselves in middle age still chasing the dream." And he thinks the long-term effects are going to be disastrous for Japan's economy and social fabric. "If the trend continues for another decade, the anxiety will be realized in the form of social and economic chaos." A recent study by Dai-ichi Life Research Institute estimated that the limited spending power of NEETs (another Japanese variation of work-force dropouts, NEET stands for "Not in Education, Employment or Training") knocked 0.15 percentage points off Japan's GDP in 2003.
Yet, while the poor get poorer, the rich are getting richer. Last month, the national tax agency released its annual list of the country's top 100 taxpayers. Tatsuro Kiyohara, a 46-year-old fund manager at Tower Investment Management, ranked No. 1, with a tax bill that suggested a personal income of approximately $100 million. This marked the first time a wage earner had captured the top spot, an occasion that many writers and talk-show hosts alternately hailed and lamented as a signature moment in the new, more Darwinian society—for Kiyohara's pay is almost entirely performance-based. The Nikkei Weekly business newspaper opined: "This new era is one in which individuals can have a significant impact on a company and its image, as demonstrated by the enormous compensation paid to this one person for creating new revenue streams."
Shinsuke Fujimoto, 37, would recognize that sentiment. Founder and CEO of Digital Hollywood, a school for computer-graphic designers and programmers, Fujimoto demonstrates a sure-handed independence and confidence in his own abilities, not to mention a distrust of conventional routes of Japanese salaryman success. Fujimoto set up his company 10 years ago, and Digital Hollywood has since grown into a $30 million business, with a network of nine schools across Japan. Fujimoto says the keys to success are clear-cut: "It's all about will, timing and the idea," he says.
And location. Situated in the middle of a rowdy Tokyo neighborhood called Ochanomizu—light years from the depressing nothingness of Ohda—Digital Hollywood's headquarters is surrounded by bookstores, cheap eateries and the capital's best universities. But Fujimoto these days is most at home in the glittering towers of Roppongi Hills, the urban development complex that has come to represent Japan's new superclass. Its avenues feature shops by Louis Vuitton, Issey Miyake, agnès b. and Anna Sui and some of the city's best restaurants. Two residential blocks in the development are among Tokyo's most prestigious addresses, and the main office tower houses the most famous companies of New Japan, including tech superstars Livedoor, Rakuten and Yahoo! Japan. On the 51st floor of this same tower is the Roppongi Hills Club, a members-only (initiation fee and deposit: $20,000) oasis of fine restaurants and spectacular views where authors, artists, celebrities and executives can gather in peace high above the masses. Every third Thursday of every month, Fujimoto convenes a meeting here of the Young Entrepreneur Organization, an association of 125 businesspeople under 40 who are the founders and CEOs of companies with at least $1 million in annual sales. The group gets together for a lecture from a corporate luminary such as ex-Sony CEO Nobuyuki Idei or Matsui Securities CEO Michio Matsui, discussion about the hot business topics of the day, and a round of networking over cocktails at the club's bar. For Fujimoto, this is the new business as usual. "The old Japanese system of socialistic capitalism is no longer applicable to the current global economy," he says.
He's probably right, and that means Japan may have to learn to live with the income disparity common throughout the rest of the world. Add to that growing anxiety over issues like Japan's rapidly aging (and soon to be declining) population and China's challenge to Japan for Asian hegemony, and there's plenty of cause for national concern. Roppongi Hills may be ready for the future, but Ijiri and the kids hanging out in the Job Cafe Osaka are not. Sociology professor Yamada says the real problem crippling Japan is not the wealth gap between rich and poor but the "hope disparity"—a widening gulf between those who see a brighter future ahead and those who do not. In Osaka, Ijiri can relate. His father's generation, he says, believed that tomorrow will be better than today. Ijiri's judgment: "I don't know if I'll ever make enough to support a family. We're most definitely headed the wrong way."
- Jim Frederick | Tokyo
- Japan likes to think of itself as one giant middle class. But wrenching economic and social shifts are splitting the nation into ranks of haves and have-nots